Wednesday, June 09, 2010

Canada commits C$600 million to build Ottawa's light rail plan

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The Canadian federal government will contribute C$600 million to transform Ottawa's transit system, making a switch from buses to light rail with a downtown tunnel through the city's core and 12.5 kilometers (7.75 miles) of light rail between Blair Road and Tunney's Pasture, local media report. Transport Minister John Baird made the long-awaited announcement June 8, matching the funding already promised by the Ontario government.

"We're now putting all our eggs in one basket, but now these are the only eggs left," Baird said, noting there won't be any more federal money for the project. The minister said he expects the city to use the funding to put towards a "practical and affordable" plan for the City of Ottawa.

The first phase of the project was originally pegged at C$1.4 billion; then it climbed to C$1.8 billion. Now, the total cost for phase one is estimated at C$2.1 billion.

The city will be on the hook for the $900-million funding shortfall. Although some question the affordability of the project, city staff believes the city will be able to cover its portion of funding without raising taxes. In October 2009, the city treasurer put out a memo saying the city planned to pay for its share of funding by a combination of development charges, gas tax funding, and the existing transit portion of your property bill.

The $900-million investment will be spread out over seven years. $435 million will come from development charges, $375 million from gas tax revenues and $75 million from existing property taxes.

However, some city councilors remain skeptical about the cost of the project, noting the city's treasurer has warned the true cost could be as much as 25 per cent more than the current price tag.

Although Mayor Larry O'Brien said the master plan for transit may be tweaked, he said the tunnel is non-negotiable. If a downtown tunnel is not built, the city predicts it will have to send an articulated bus through the downtown core at the rate of one every 18 seconds to meet demand for transit by 2031. O'Brien said the current plan is the one the city is going to move ahead with, noting that other levels of government want to make sure the city makes an affordable choice.

"They want us to make it work. They want us to make sure we're not delivering a Cadillac, when we can deliver a Chevrolet. They want to make sure that we're being cost-effective, and that the bidders, the private sector part of this process, that they've sharpened their pencil right down to the point where we can fit it inside the envelope of the funding we have," he said.

The city's current plan for transit replaces a north-south light rail line that was cancelled following the last municipal election. In September 2009, the city agreed to a $36.7-million settlement with a consortium led by Siemens over the cancelled light rail contract. At the time, the mayor said the cost of canceling the contract was a better financial decision than going through with it.

"In 2006, we stopped a plan that nobody liked. Today, we've started a plan that will solve problems in transportation for the balance of this century," said O'Brien.

He predicts it will take about one year to complete the procurement process of the new plan. Construction on the first phase of the project is expected to begin in 2013, with a completion date of 2018.

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